CREDIT CARDS
Out with the Loans, In with the 0% Credit Cards
Personal loan rates have rocketed to their highest level for more than a decade, figures reveal.
Consumers looking to borrow money either for major purchases, or as a means to pay off debt, are therefore urged to consider other alternatives.
The figures revealed by Money Facts show the average rate on a £5,000 loan stands at 12.7 percent, and these rates are the highest they have been since May 2000.
“In a market where household finances are being stretched the risk of customers not repaying the loan increases and this is passed onto customers through higher loan rates,” commented Michelle Slade, Moneyfacts spokesperson.
“The price war between supermarkets isn’t just on groceries, it has spilled over into the personal finance market.
“On nearly all loan amounts the supermarkets have the most competitive rates.”
Credit Cards
For consumers looking to borrow money, the personal loan market could possibly be the most expensive means of doing so. Instead, there are many credit card offers on the market with 0 percent interest on balance transfers and purchases for an introductory period.
The Natwest Classic Credit Card offers 13 months interest free on purchases and balance transfers, so you have over a year to pay off the money you borrow without earning any interest.
If you have not managed to clear your balance after this period, or have an outstanding balance elsewhere, Barclaycard offer a record 20 months interest free period on balance transfers on their Barclaycard Platinum Credit Card.
This offer also enables customers to get £10 off the balance transfer fee if they transfer more than £2,500. On purchases there is a 0 percent interest period for three months from account opening, and a 3.2 percent handling fee.
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